KSAT Money: Types of investments and their risks

SAN ANTONIO – Money you get back during income tax season means some people have extra funds to use for things like home repairs and vacations. But what if you’re looking to invest?

If you’ve come across some extra money lately, or you just want to invest, you may start looking into the stock market to grow your finances. With apps such as Robinhood and Stash, it has never been easier.

But investments are like candy. There are thousands of options, and some have sweeter returns than others.

The first thing you should consider is what type of investment is right for you:

  • Stocks grant you shares of ownership of a company.
  • Treasury securities are a way of lending money to the federal government.
  • U.S. savings bonds are investments endorsed by the federal government.

Sometimes, companies will even pay dividends to shareholders.

Each investment possesses its own risk. However, with some risk comes sweeter rewards. Your earning potential is higher when the investment is a greater risk.

And while treasury securities are backed by the government, that doesn't mean you're protected from loss on any other investments.

There are ways to reduce your risk, though, such as diversifying your holdings. That means putting your money in a variety of investments.

To learn more about the different types of investments, click here.

About the Author

Ivan Herrera has worked as a journalist in San Antonio since 2016. His work for KSAT 12 and KSAT.com includes covering breaking news of the day, as well as producing Q&As and content for the "South Texas Pride" and "KSAT Money" series.

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